SC To Lose $807M In Fed Funding Due To Medicaid

South Carolina stands to lose $807 million in federal funds in 2022 by not expanding its Medicaid program as allowed under the Affordable Care Act, a new Commonwealth Fund analysis shows.

"The Medicaid expansion presents an opportunity for states to bring in new federal dollars, in addition to providing critical health coverage for their low-income residents," said researcher Sherry Glied of New York University's Wagner Graduate School of Public Service.

"No state that declines to expand the program is going to be fiscally better off because of it," she added. "Their tax dollars will be used to support a program from which nobody in their state will benefit."

The federal money for state Medicaid programs is funded by taxpayers in all states, according to Fund researchers. So residents in states that don't expand will help fund the cost in other states without benefitting, they said.

Under the ACA, most Americans must have health insurance by 2014. People making up to 138 percent of the federal poverty level were to be covered by a Medicaid expansion.

But the U.S. Supreme Court ruled last year that expansion was up to the states.

The federal government pays all of the expansion costs through 2016, with its share declining after that to 90 percent in 2020 and beyond.

South Carolina is one of 20 states that chose not to expand the Medicaid program, the researchers said. The program now covers nearly 1 million residents, six in 10 of them children. State officials said it would be financially irresponsible to fund permanent programs with temporary dollars.

"I respect the previous work of the Fund and I'm surpised given all their research into how little value the health care system delivers in the United States that they are advocating spending trillions more," state Department of Health and Human Services director Tony Keck said in a statement to GreenvilleOnline.com.

"As I testified before the South Carolina Senate today, we are pursuing a path of delivery system redesign that gets meaningful help to our citizens most in need," he added. "We can do this without committing to the expansion of an open-ended entitlement program that is straining state budgets across the country and is often an empty promise to those individuals it is intended to help."

Among those changes is the Healthy Outcomes initiative, which is aimed at reducing the inappropriate use of costly hospital emergency room services by giving hospitals funds to devise plans that improve coordination of care and health outcomes of uninsured patients while also lowering costs.

But Rozalynn Goodwin, director of policy research for the South Carolina Hospital Association, said the Commonwealth Fund study "joins a stack of others echoing that South Carolina is sending its dollars to other states, impacting South Carolina taxpayers and businesses just as it's impacting South Carolina health care providers. And we can't continue to ignore the mounting evidence."

Hospitals are helping pay for the ACA through Medicare and Medicaid reimbursement cuts, she said. And combined with the uncompensated care of uninsured patients who cannot enroll in Medicaid, it could affect hospitals' credit ratings, their ability to borrow money and expand programs, she said.

The researchers said states with the largest net losses in 2022 would include Texas, with $9.2 billion; Florida, $5 billion; Georgia, $2.9 billion, and Virginia, $2.8 billion.